FINRA Permanently Bars Wells Fargo Financial Advisor Matthew Christopher Maczko for Churning in Elderly Clients Accounts
Posted on Monday, March 20th, 2017 at 4:19 pm
Erez Law is currently investigating Wells Fargo financial advisor Matthew Christopher Maczko (CRD# 1888519) regarding excessive trading in customer accounts. Maczko was registered with Wells Fargo in Oak Brook, Illinois, from 2008 to 2016. Maczko was terminated from Wells Fargo in September 2016 following allegation of excessive trading in an elderly client’s account.
In February 2017, FINRA found that Maczko made excessive trading transactions in four customer accounts of a 93-year-old investor, between January 2009 and April 2016. According to the Acceptance, Waiver & Consent, while in control of these accounts that had an aggregate value of $3 million, he made transactions that generated $581,650 in commissions, $84,270 in other fees, and approximately $397,000 in trading losses. When a stockbroker or financial advisor earns compensation from the purchase and sale of securities on behalf of a client, it can create an inherent conflict of interests. The broker may begin to act in his or her own best interests instead of the client’s, continually trading stocks to generate more commission. This scenario is called churning, and it can cost the client money in unnecessary trading as well as from a poorly performing account.
These trades were unsuitable for the customer given her age, risk tolerance, and income needs. FINRA also found that Maczko provided inaccurate and misleading testimony, stating that he did not speak with two customers after his termination by Wells Fargo, but it was found that he did communicate them after reviewing his telephone records. FINRA has permanently barred Maczko from acting as a broker or otherwise associating with firms that sell securities to the public.
Maczko has been the subject of six customer complaints between 1995 and 2016, according to his CRD report:
November 2016. “Client verbally alleged unauthorized trades and excessive commission rates. (10/23/2015-1/19/2016).” The case was settled for $20,000.
September 2016. “Claimants allege that from 2008 through 2016, FA recommended unsuitable investments, and misrepresented information in September 2016.” The case was settled for $375,000.
May 2016. “Client verbally alleged unauthorized trades and was unaware of the amount of commissions that she had incurred. (1/1/2012-1/1/2016).” The case was settled for $1 million.
May 2006. “Client claims that he is ‘Looking into the possibilities of turning you into the sec for misrepresentation and fraud.’ Time frame: 2006.” The client sought $39,378 in damages but the case was denied.
April 2003. “Client alleges that broker recommended unsuitable investments. Estimated losses exceed $5000.” The case was denied.
January 1995. “Claimants allege unsuitable and unauthorized transactions as well as misrepresentations regarding their investments in equities, including Macdonald’s options and AT & T scores and allege compensatory damages in the amount of $48,741.00 and punitive damages. The transactions took place during the time period 1989 through 1990.” The customer sought $40,761.88 in damages and the case was settled for $35,000.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Wells Fargo may be liable for investment or other losses suffered by Maczko’s customers.
Erez Law represents investors in the United States for claims against Wells Fargo financial advisor Matthew Christopher Maczko, who is alleged to make excessive trades in elderly persons accounts. If you were a client of Wells Fargo financial advisor Matthew Christopher Maczko or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.